The coronavirus pandemic has impacted everyone. This public health crisis has infected millions of people all over the world and led to hundreds of thousands of deaths. In response to this crisis, many communities had to institute shelter-in-place orders. This meant that people are not able to leave their homes unless they had an emergency or worked an essential job. As a result, the revenue streams for many businesses dried up. To remain open, many people had to be laid off. Some small businesses had to close forever. Therefore, there are a lot of people looking for work. This begs the question, how exactly has the pandemic impacted the job market? There are several key points that everyone should keep in mind.
Skyrocketing Unemployment Rates
With so many people getting laid off, there were a lot of individuals and families that started to have problems making ends meet. As a pandemic continued, more and more people ended up getting laid off. Within the period of a few months, unemployment rates all over the world shot up. They started to reach numbers that had not been seen since the great depression.
With this in mind, record numbers of people were filing for unemployment. Many people are wondering whether the government was going to keep up with the demand for unemployment benefits. The reality is that with so many people looking for work, there simply aren’t enough openings to accommodate everybody.
Analysts Are Calling This a Reallocation Shock
Many experts study economics and job markets who are calling this a reallocation shock. This refers to a dramatic, sudden shift in consumer demand and business practices. This leads to a dramatic shift in the kinds of jobs that employers are looking to fill. As mentioned above, many small businesses ended up having to close forever. Some of the biggest companies in the world also started to close their doors. Some of the industries that have been hit the hardest include the hospitality, entertainment, and travel sectors. With very few people traveling or vacationing right now, there simply isn’t a lot of demand for these services. As a result, when looking at employment numbers, these industries have been hit the hardest.
On the other hand, there is increased demand in other sectors of the economy. New types of jobs have been beginning to emerge as well. For example, there has been an increased demand for people to work jobs and pharmaceuticals, health care, and grocery stores. Many of these jobs are considered essential, which is why they are looking to hire people. Also, there are newer jobs that are beginning to emerge as well. For example, there has been an increased demand for people to work in the delivery and warehousing sectors. There are also new jobs looking to eCommerce. These jobs are connected to remote capabilities, which is why they are in higher demand right now. This is how reallocation shock has an impact on the job market.
Looking at the Future
Right now, one of the biggest questions that many people are asking is whether this reallocation is going to be permanent. The pandemic is going to be with us until we find a vaccine. Eventually, an effective vaccine is going to be released. Then, it will be interesting to see how the job market responds. Are these trends going to become permanent? Or, are they going to revert to the pre-pandemic days? It will be interesting to see what happens next.